Chapter 17—Markets with Asymmetric Information非对称性市场.pptVIP

Chapter 17 — Markets with Asymmetric Information Chapter Outline Quality Uncertainty and the Market for Lemons Market Signaling Moral Hazard The Principal-Agent Problem Managerial Incentives in an Integrated Firm Asymmetric Information in Labor Markets: Efficiency Wage Theory 1 Quality Uncertainty and the Market for Lemons Asymmetric Information — situation in which a buyer and seller possess different information about a transaction. George A. Akerlof: The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism published by Quarterly Journal of Economics(1970) When sellers of products have better information about product quality than buyers, a “lemons problem” may arise in which low-quality goods drive out high-quality goods. In (a) the demand curve for high-quality cars is DH. However, as buyers lower their expectations about the average quality of cars on the market, their perceived demand shifts to DM. Likewise, in (b) the perceived demand curve for low-quality cars shifts from DL to DM. As a result, the quantity of high-quality cars sold falls from 50,000 to 25,000, and the quantity of low-quality cars sold increases from 50.000 to 75.000. Eventually, only low-quality cars are sold. Implications of Asymmetric Information Adverse selection -- form of market failure resulting from asymmetric information: if insurance companies must charge a single premium because they can not distinguish between high-risk and low-risk individuals, more high-risk individuals will insure, making it unprofitable to sell insurance. 2 Market Signaling Market Signaling– Process by which sellers send signals to buyers conveying information about product quality. Note: Michael Spence: Market Signaling(1974) Education can be a useful signal of the high productivity of a group of workers if education is easier to obtain for this group than for a low-productivity group. In (a), the low-producti